Rana Kapoor, the arrested founder and former managing director of India’s crisis-hit Yes Bank, faces a double charge of corruption and money laundering to the tune of almost $602million.
Kapoor was sent on Sunday to police custody until Wednesday by a court in Mumbai following his arrest.
The Enforcement Directorate (ED) arrested Rana Kapoor early on Sunday after hours of interrogation and searches at his and his daughters’ residences in Delhi and Mumbai. The 62-year-old broke down when he was produced in a Mumbai court.
ED’s lawyer Sunil Gonsalves said at the hour-long hearing the total proceeds of the alleged crime amounted to Rs 4,300 crore, about$602million, and that Rana Kapoor had refused to cooperate with the investigation.
Rana Kapoor denied this. “I want to cooperate with them,” he told the court through tears. “I’m willing to cooperate day and night despite the fact that I haven’t slept a wink.”
His lawyer Zain Shroff told the court his client had been made “a scapegoat” due to public outrage against Yes Bank after the Reserve Bank of India (RBI) placed the bank under a moratorium and imposed a Rs 50,000-limit on withdrawals.
Weighed down by an increasing pile of bad debt, Yes Bank tried unsuccessfully for months to raise the capital it needs to stay above regulatory requirements.
On Thursday, RBI took control of Yes Bank and said it would work on a revival plan. State Bank of India (SBI) said on Saturday it would invest funds to buy a 49 per cent stake in Yes Bank as part of the initial phase of a rescue deal for the troubled lender.
Last week finance minister Nirmala Sitharaman said Yes Bank had granted loans to entities including bankrupt Dewan Housing and Finance Ltd (DHFL).
The bank is the third significant Indian financial institution to unravel in the last six months, following the RBI’s moves to take control of Dewan Housing and Punjab & Maharashtra Co-operative Bank.
According to NDTV, investigators from the Enforcement Directorate are probing Kapoor over investments worth over Rs 2,000 crore, 44 expensive paintings and a dozen alleged shell firms.
The agency, official sources said, has also recovered documents that show some assets of the Kapoor family in London and the source of funds for their acquisition is now being investigated.
The central probe agency that began action against the banker by raiding his residence in south Mumbai on Friday is primarily investigating Mr Kapoor, his wife and three daughters over a Rs 600 crore fund received by a firm allegedly “controlled” by them from an entity linked to the scam-hit Dewan Housing Finance Limited (DHFL).
Kapoor’s firm, DoIT Urban Ventures (India) Pvt Ltd, was alleged to have received the funds when Yes Bank had an exposure of more than Rs 3,000 crore loans to DHFL, already being probed for purported financial irregularities and diversion of funds.
The bank, they said, allegedly did not initiate action to recover the NPA-turned loans from DHFL and the agency suspects that the Rs 600 crore funds were part of alleged kick backs received as quid pro quo in the firm controlled by the Kapoor family.
The ED, officials said, is looking at finding the proceeds of crime during the raids conducted at Mr Kapoor’s residence and those of his wife Bindu and three daughters. It has stumbled upon investments worth over Rs 2,000 crore by the family and the active presence of about a dozen shell or dummy firms used to rotate alleged kick backs, they said.